The simple capm is valid and all portfolios are priced

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Reference no: EM13509853

If the simple CAPM is valid and all portfolios are priced correctly, which of the situations below is possible? Consider each situation independently, and assume the risk-free rate is 5%.

A)
Portfolio Expected
Return Beta
A 18 % 0.9
Market 18 % 1.0

B)
Portfolio Expected
Return Standard
Deviation
A 21 % 9 %
Market 16 % 17 %

C)
Portfolio Expected
Return Beta
A 21 % 0.9
Market 16 % 1.0

D)
Portfolio Expected
Return Beta
A 27.1 % 1.7
Market 18 % 1.0
Option A
Option B
Option C
Option D

Reference no: EM13509853

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